Fulfilment
Part of Subscription pricing and contribution margin
Calculating the cost of a subscription shipment
Build a per-shipment cost record for a physical-product subscription, including contents, packing, delivery, payment and exceptions.
A parcel’s cost is contents + packaging + fulfilment + delivery + payment + any exception allowance. Build it from actual item costs, packing records, a current quote for the packed parcel and the actual payment fee; use the same GST basis for every line. Use the result when assessing a plan price.
Build a cost record for one order
List each unit in the box or variant and its acquisition cost. Include costs to make stock ready for sale where relevant, but do not count the same freight or handling charge twice. Add the carton or satchel, protective material, label and inserts.
Measure packing time for the intended process and apply a consistent labour cost, including applicable employment costs. If a fulfilment provider packs the parcel, enter its charge for that order instead.
Record the delivery service and chosen extras as a cost to the business. A separate delivery payment from the customer is revenue; it does not reduce the carrier cost. Keep one-off set-up spending and general overhead in a separate business-level view.
| Cost line | What to enter |
|---|---|
| Contents | Actual units and acquisition cost for this variant |
| Packaging | Outer pack, protection, label and inserts |
| Fulfilment | Packing labour or the provider charge for this order |
| Delivery | Quoted service, destination and chosen extras |
| Payment | Fee for the charge funding this shipment, allocated if it funds several |
| Exceptions | An allowance based on relevant experience, or a clearly labelled assumption until data exists |
State the basis for any exception allowance and distinguish observed costs from assumptions.
Build a cost record for one order
- List each unit or variant and its acquisition cost
- Add carton or satchel, protective material, label and inserts
- Measure packing time and apply a consistent labour cost, or use the provider charge
- Enter the quoted delivery service, destination and chosen extras
- Allocate the payment fee across the shipments it funds
- Add an exception allowance with a stated basis
Delivery cost versus customer delivery payment
- Carrier delivery cost
- Cost to the business; use the quoted service, destination and chosen extras
- Customer delivery payment
- Revenue; it does not reduce the carrier cost
Quote the packed parcel
Pack the intended contents and packaging, then record the parcel’s outer dimensions and packed weight. For Australia Post, request the current postage price for that parcel, origin, destination, service and chosen extras; use the quoted amount as the delivery cost.
Use a service-specific quote rather than an estimate based on weight alone, and check the carrier’s current terms for the selected packaging and service. Obtain quotes for the routes and box configurations the business expects to use, as other carriers or negotiated accounts may have different terms.
Check both a typical parcel and the largest permitted combination. An extra item may require a larger carton and change the delivery cost. Where those options are offered, calculate remote destinations or special handling separately.
Keep tax and prepaid fees consistent
GST is 10% on most goods and services sold or consumed in Australia. Choose either GST-inclusive or GST-exclusive costs and use one basis throughout; a GST-registered business can generally claim GST credits for GST on business purchases. Check the ATO treatment and the invoice for each input before removing any GST from the cost.
For a prepaid payment, use the total fee actually charged and divide it equally across the shipments that payment funds. Payment fee per shipment = total prepaid payment fee ÷ number of shipments funded. Keep the fee and its GST treatment consistent with the basis used for the other costs.
For each shipment, add contents, packaging, fulfilment, delivery, the allocated payment fee and any exception allowance on the same GST basis. Keep separate shipment costs where contents or postage vary by cycle.
